Running your FSSC as a “User-Centric Business”:  Quick Win Strategy Dick Lam February 8, 2007
Be realistic…. <ul><li>FSSC can bring millions of benefit to the Corporate but people will not see it at the very beginnin...
<ul><li>I don’t believe that somebody in offshore know the local situation more than I </li></ul><ul><li>I can promptly re...
APAC Business Environment <ul><li>China being the world factory </li></ul><ul><li>Serving the domestic market as well as o...
User-Centric Business <ul><li>Deliver what the customers wants and needs </li></ul><ul><li>Create the needs of the custome...
Who are our customers? <ul><li>1 st  Tier </li></ul><ul><li>Local Finance Dept </li></ul><ul><li>2 nd  Tier </li></ul><ul>...
Who are our customers? <ul><li>1 st  Tier </li></ul><ul><li>Local Finance Dept </li></ul><ul><li>Local Finance Dept is not...
If the work of FSSC needs verification of local  finance team before release, it is a failure!!
What our customers needs & wants? <ul><li>No disturbance to the existing operation </li></ul><ul><ul><li>Right & accurate ...
<ul><li>Centralized information for resources/asset re-allocation </li></ul><ul><ul><li>Continuity of accounting services ...
Change Management <ul><li>Change is exciting when it is done  by us , threatening when it is done  to us </li></ul><ul><li...
<ul><li>Local Arrangement </li></ul><ul><ul><li>Compensation for the affected </li></ul></ul><ul><ul><li>Sufficient notice...
LEAN <ul><li>Waste vs. value added </li></ul><ul><li>Takt time </li></ul><ul><li>Demand Pull & Continuous Flow </li></ul><...
Waste vs. Value-Added <ul><li>Anything that does not bring value to Customers/(Suppliers) are waste (waiting and correctio...
Goods receipt to payment
5 Why <ul><li>Continue to ask question about a problem to find out the underlying reason of the issue </li></ul><ul><li>Wh...
5S <ul><li>Sort </li></ul><ul><ul><li>Sort out the value-added process </li></ul></ul><ul><li>Straighten </li></ul><ul><ul...
Andon <ul><li>Green – Normal </li></ul><ul><li>Yellow – Changeover </li></ul><ul><li>Red – Abnormal, machine down </li></u...
Poka Yoke (Avoid any inadvertent Errors) <ul><li>Unintentional Errors </li></ul><ul><li>Overlook </li></ul><ul><li>Misunde...
Ishikawa/Fishbone Diagram
DMAIC <ul><li>Define </li></ul><ul><li>Measure </li></ul><ul><li>Analyze </li></ul><ul><li>Improve </li></ul><ul><li>Contr...
My Struggle in FSSC <ul><li>I, as referred by  Mr. Cheung Hon Wan (being the Finance Director) , joined the reputable prin...
<ul><li>The headquarters of FSSC was determined by US Corporate instead of a local decision </li></ul><ul><li>The new fact...
<ul><li>Unable to resist as Mr. Cheung hired me though I had reservation in the location of FSSC. (why not China in the pe...
<ul><li>During 2002, lots of complaints heard about FSSC – inexperienced, not sufficient know-how, too many questions aske...
<ul><li>Change is exciting when it is done by us, threatening when it is done to us.  The strategy was to  make it done by...
<ul><li>I had no voice in influencing the planning, what I had was performance </li></ul><ul><li>The normal closing cycle ...
Questions?
[email_address] or http://360.yahoo.com/lamchorki128
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Financial Share Service Centre

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A speech given on Nov 8, 2007 in Shanghai in a forum of Asian Financial Share Service Centre

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Financial Share Service Centre

  1. 1. Running your FSSC as a “User-Centric Business”: Quick Win Strategy Dick Lam February 8, 2007
  2. 2. Be realistic…. <ul><li>FSSC can bring millions of benefit to the Corporate but people will not see it at the very beginning </li></ul><ul><li>Change is exciting when it is done by us , threatening when it is done to us </li></ul><ul><li>FSSC is to move jobs of Finance/Accounting from various locations to a centralized one </li></ul><ul><li>Somebody get the jobs, the other lose the jobs </li></ul>
  3. 3. <ul><li>I don’t believe that somebody in offshore know the local situation more than I </li></ul><ul><li>I can promptly respond to any request from our fellow workers </li></ul><ul><li>Telephone & email are not effective tools in communication particularly in urgent situation </li></ul><ul><li>How comes a remote support can out-perform me in local job task? </li></ul><ul><li>Is cost really lower? </li></ul><ul><li>……… </li></ul>The local accountant
  4. 4. APAC Business Environment <ul><li>China being the world factory </li></ul><ul><li>Serving the domestic market as well as other Asian countries and the rest of the world </li></ul><ul><li>Lots of MNC have factories in China and sales offices over the region </li></ul><ul><li>Tremendous inter-company transactions and inter-relationship complicate the business operations </li></ul>
  5. 5. User-Centric Business <ul><li>Deliver what the customers wants and needs </li></ul><ul><li>Create the needs of the customers for FSSC </li></ul><ul><li>Change Management – Identifying the value and remove the barrier </li></ul><ul><li>Process Improvement </li></ul><ul><li>Resources centralization </li></ul>
  6. 6. Who are our customers? <ul><li>1 st Tier </li></ul><ul><li>Local Finance Dept </li></ul><ul><li>2 nd Tier </li></ul><ul><li>Local Functional Depts </li></ul><ul><li>Inter-companies & Corporate </li></ul><ul><li>3 rd Tier </li></ul><ul><li>External Parties such as Banks, Suppliers & Customers </li></ul>
  7. 7. Who are our customers? <ul><li>1 st Tier </li></ul><ul><li>Local Finance Dept </li></ul><ul><li>Local Finance Dept is not our customer, they are our co-workers </li></ul><ul><li>We are part of it, FSSC operation is embedded into local finance dept </li></ul><ul><li>Responsible FSSC personnel reports as staff of local finance dept </li></ul><ul><li>They directly deal with the stakeholders of the finance operations </li></ul><ul><li>They should get the input directly and should not pose additional burden to the local manager </li></ul>
  8. 8. If the work of FSSC needs verification of local finance team before release, it is a failure!!
  9. 9. What our customers needs & wants? <ul><li>No disturbance to the existing operation </li></ul><ul><ul><li>Right & accurate records on time, i.e. inventory/costing are ready for operation upon receipt </li></ul></ul><ul><ul><li>Smooth document flow </li></ul></ul><ul><ul><li>Settlement to suppliers on time, i.e. no delay of delivery due to default payment </li></ul></ul><ul><ul><li>All in all, we need to ensure smooth back office support </li></ul></ul>Back to Basic
  10. 10. <ul><li>Centralized information for resources/asset re-allocation </li></ul><ul><ul><li>Continuity of accounting services – similar to IT </li></ul></ul><ul><ul><li>Re-balance of inventory within region </li></ul></ul><ul><ul><li>Ease to apply standardized criteria/methodology to provisional accounting, such as inventory, commission and receivables </li></ul></ul><ul><ul><li>Prioritize cash resource and requirement planning to ensure no excessive cash in any single geography </li></ul></ul><ul><ul><li>Unified IT strategy to cope with business development over the region </li></ul></ul>Information on Decision Making
  11. 11. Change Management <ul><li>Change is exciting when it is done by us , threatening when it is done to us </li></ul><ul><li>Commitment from the Top Management, Local Management and Local Finance Management </li></ul><ul><li>Mandatory participation of local management in planning & execution </li></ul><ul><ul><li>Goal setting for the local management </li></ul></ul><ul><li>Benefits of the FSSC has to be explicit – it is to take away non-value added job task </li></ul><ul><li>Cost consideration – FSSC in high cost geography is not justified. Acknowledge increase in running cost in short term </li></ul><ul><li>Kaizen request from local management as well as from FSSC itself </li></ul><ul><li>Goal setting, planning & execution should be separated. Alleviate the burden of the execution team </li></ul>
  12. 12. <ul><li>Local Arrangement </li></ul><ul><ul><li>Compensation for the affected </li></ul></ul><ul><ul><li>Sufficient notice to the affected </li></ul></ul><ul><ul><li>Transparency of the plan & its execution </li></ul></ul><ul><ul><li>Direction should be clear </li></ul></ul><ul><ul><li>Short term retention plan to ensure transition of work </li></ul></ul><ul><li>Proof of competency of FSSC personnel </li></ul><ul><ul><li>Language </li></ul></ul><ul><ul><li>Knowledge </li></ul></ul><ul><ul><li>Communication skill/presentation </li></ul></ul><ul><ul><li>Attitude (be humble) </li></ul></ul><ul><li>Transition Strategy </li></ul><ul><ul><li>Local team participation and responsibility </li></ul></ul>Any Killer Application ? One to say Yes, Two to say No!
  13. 13. LEAN <ul><li>Waste vs. value added </li></ul><ul><li>Takt time </li></ul><ul><li>Demand Pull & Continuous Flow </li></ul><ul><li>5S </li></ul><ul><li>5-Why </li></ul><ul><li>Andon </li></ul><ul><li>DMAIC </li></ul><ul><li>Ishikawa/Fish bone Diagram </li></ul><ul><li>Poka Yoke </li></ul>6 Sigma
  14. 14. Waste vs. Value-Added <ul><li>Anything that does not bring value to Customers/(Suppliers) are waste (waiting and correction are the material waste in Accounting Operation) </li></ul>Takt time <ul><li>Takt is the rhythm or beat of the flow line </li></ul><ul><li>It determines the rate at which work must be accomplished at each operation (operational cycle time) based on the line rate </li></ul>
  15. 15. Goods receipt to payment
  16. 16. 5 Why <ul><li>Continue to ask question about a problem to find out the underlying reason of the issue </li></ul><ul><li>Why does A/P control account not tie up to Accounts Payable breakdown by suppliers? </li></ul><ul><li>The system design has General Ledger Account & A/P sub-ledger module. </li></ul><ul><li>Why do we have such design? </li></ul><ul><li>It is IT dept to set up upon which each supplier point to the single control account </li></ul><ul><li>Why do we need to point to a single ledger account? </li></ul><ul><li>We have a single Supplier Type that determine what account to point to </li></ul><ul><li>Why do we have a single supplier type? Or Why don’t we have multi-supplier type? </li></ul><ul><li>The Supplier Type is 4-digit code. It will create a lot of G/L account code. </li></ul>Do we have 36 4 = 1,679,616 suppliers? (A~Z, 0~9) Socrates: the great inquisitor
  17. 17. 5S <ul><li>Sort </li></ul><ul><ul><li>Sort out the value-added process </li></ul></ul><ul><li>Straighten </li></ul><ul><ul><li>Streamline the document flow for transaction processing </li></ul></ul><ul><li>Shine </li></ul><ul><ul><li>Simplify the process and make it known to everybody </li></ul></ul><ul><li>Standardize </li></ul><ul><ul><li>Standardize the practice </li></ul></ul><ul><li>Sustain </li></ul><ul><ul><li>Make sure procedures are followed by using KPI to evaluate performance </li></ul></ul>Surface all kinds of problem
  18. 18. Andon <ul><li>Green – Normal </li></ul><ul><li>Yellow – Changeover </li></ul><ul><li>Red – Abnormal, machine down </li></ul><ul><li>Identify supporting resources and personnel once abnormality emerge or likely to emerge </li></ul><ul><li>Define the responsibility of supporting </li></ul><ul><ul><li>what-if responsibility for structured problem </li></ul></ul><ul><ul><li>Core group on non-structured problem </li></ul></ul><ul><li>A problem found in 1 country may imply problem to be emerged in another country </li></ul>Implication
  19. 19. Poka Yoke (Avoid any inadvertent Errors) <ul><li>Unintentional Errors </li></ul><ul><li>Overlook </li></ul><ul><li>Misunderstanding </li></ul><ul><li>Judgment </li></ul><ul><li>Inexperience </li></ul><ul><li>Frequency </li></ul><ul><li>No Benchmarking Standard </li></ul><ul><li>Accident </li></ul><ul><li>Intentional </li></ul>
  20. 20. Ishikawa/Fishbone Diagram
  21. 21. DMAIC <ul><li>Define </li></ul><ul><li>Measure </li></ul><ul><li>Analyze </li></ul><ul><li>Improve </li></ul><ul><li>Control </li></ul>
  22. 22. My Struggle in FSSC <ul><li>I, as referred by Mr. Cheung Hon Wan (being the Finance Director) , joined the reputable printer manufacturing company in 2000 to set up 1 st factory in China </li></ul><ul><li>At 2001 year end, the factory was up and running. I had an army of finance staff to back up me. </li></ul><ul><li>Mr. Cheung told me that FSSC, being based in Singapore, was also up and running! </li></ul>
  23. 23. <ul><li>The headquarters of FSSC was determined by US Corporate instead of a local decision </li></ul><ul><li>The new factory site was not covered in the 1 st year (2002) of FSSC operation but it would start from 2 nd year (2003) </li></ul><ul><li>The initial scope would cover Inter-company transaction (AR & AP), inventory accounting, and all Bank transactions; in short, all basic accounting job tasks </li></ul>
  24. 24. <ul><li>Unable to resist as Mr. Cheung hired me though I had reservation in the location of FSSC. (why not China in the perspectives of cost & technical know-how?) </li></ul><ul><li>Who would know the inventory & inter-company transactions more than my team as all the stuff coming out from my site?! </li></ul><ul><li>All the team members in FSSC are new to the company…. </li></ul><ul><li>Anyway, I had to follow as I also knew that it is not Mr. Cheung decision to locate the FSSC </li></ul><ul><li>But would it succeed? I doubt….. </li></ul>
  25. 25. <ul><li>During 2002, lots of complaints heard about FSSC – inexperienced, not sufficient know-how, too many questions asked to perform a job task, time consuming…. Month end closing by FSSC not satisfactory, no improvement at all </li></ul><ul><li>At the same time, my team as well as myself were getting more & more experience and knowledge in the business operation. </li></ul><ul><li>My team was really working hard …. </li></ul><ul><li>Although result of FSSC was dissatisfactory, it continued to extend to the manufacturing site. But at the same time, Mr. Cheung quit the position and the project was led by a Scottish. </li></ul>
  26. 26. <ul><li>Change is exciting when it is done by us, threatening when it is done to us. The strategy was to make it done by us. Above all, we had the advantages to do that </li></ul><ul><li>Why FSSC? </li></ul><ul><ul><li>Cost reduction </li></ul></ul><ul><ul><li>Operation effectiveness & efficiency </li></ul></ul><ul><ul><li>Operation continuity </li></ul></ul><ul><li>Planning & execution can be separated </li></ul><ul><li>We had the thorough knowledge of ERP system and we could leverage the concept of Lean/Six Sigma in process improvement </li></ul><ul><li>Killer application – Inventory Aging Report </li></ul>
  27. 27. <ul><li>I had no voice in influencing the planning, what I had was performance </li></ul><ul><li>The normal closing cycle was 4 working days according to US calendar and all countries usually handed in at the last minute. </li></ul><ul><li>However, the China team always submitted in Day 3 and the performance was consistent. Every report, schedule, accounts breakdown has detail supporting. No dummy account for pending items </li></ul><ul><li>Our labor cost was the lowest compared to ANZ, ASEAN, HKG, JPN, TAI, China Sales Office & etc… </li></ul><ul><li>We may not be good at planning but specialized in execution </li></ul><ul><li>One day, my manager approached me and examined how our works were done…… </li></ul>
  28. 28. Questions?
  29. 29. [email_address] or http://360.yahoo.com/lamchorki128

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